MSPs: A Free Approach to Cloud Profits?

Evolve Technologies, a managed services provider in Washington, D.C., seems to be piecing together a compelling cloud strategy that involves iLand, ThinkGrid and Doyenz. Here's the twist: Evolve helps customers migrate to the cloud for free; there's no charge for the migration project if the customer agrees to a long-term service contract with Evolve. Here are the details.

Evolve Technologies, a managed services provider in Washington, D.C., seems to be piecing together a compelling cloud strategy that involves iLand, ThinkGrid and Doyenz. Here’s the twist: Evolve helps customers migrate to the cloud for free; there’s no charge for the migration project if the customer agrees to a long-term service contract with Evolve. Here are the details.

While driving to a customer meeting this morning, Evolve CEO Dave Sobel shared some thoughts about his cloud strategy. The goal is to “assemble a range of solutions from multiple back-end services,” says Sobel. In addition to being an MSP, Sobel thinks of Evolve as a “contract” service provider — a company that sits between cloud organizations and end-customers, helping to select services and coordinate contractual engagements.

Instead of betting on a single solution, Evolve is partnering up with multiple companies. They include:

Money Matters

Traditional Cloud Strategy: When I speak with many MSPs about the cloud, they talk about making big money from migration work. A prime example: Plenty of MSPs say they can generate healthy project revenue migrating customers from on-premises Exchange Server to online services like Microsoft BPOS (Business Productivity Online Suite). The up-front project cash is good, but the long-term recurring revenue can be somewhat challenging because Microsoft controls BPOS pricing and doesn’t offer much margin to VARs.

Evolve’s Strategy: In stark contrast, Evolve’s strategy is somewhat similar to consumer phone companies, broadband service providers and cellular service providers. Evolve won’t charge you a migration fee into its cloud services — if you agree to sign a longer-term, recurring revenue services contract to stick with Evolve.

It’s the old-but-reliable Gillette strategy — give them the razor but keep charging for the blade. Forever.

Sobel certainly isn’t declaring victory in the cloud. But generally speaking, he thinks Evolve is ahead of the curve compared to VARs and MSPs that are kicking the tires on BPOS and other commercial SaaS services. I’ll provide an update on Sobel’s cloud strategy when he and I connect at the Microsoft Worldwide Partner Conference (WPC) in July 2010.

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